China to Promote Small Cars to Save Energy

Date:08-Nov-05Country: CHINA

Beijing would back up the talk with new standards for small, low-emissions cars, Liu Zhi, head of the National Development and Reform Commission's industry policy bureau, was quoted as saying by Xinhua news agency.

Many big cities in China had previously banned slow-moving small cars from expressways, but those rules would have to be lifted, Liu said.

"With international oil prices consistently rising and pressure from China's oil consumption growing day by day, (the bans) do not match the national situation," he was quoted as saying at a conference in Beijing.

Car ownership has exploded in recent years in China, the number of vehicles per thousand people rising from fewer than five in 1990 to 21 last year.

In a report issued last year, the National Development and Reform Commission predicted automobiles will be the fastest-growing driver of domestic oil demand over the next few years.

But record-high international oil prices have created tensions in China and left domestic refiners trapped between rising crude markets and government-capped retail prices, which are among the world's lowest.

Cars with engines that displaced 1.4 litres or less, measured around 12 metres long and met certain emissions and pricing standards would qualify as economy cars under the new rules, Liu was cited as saying.

The government may use tax policy to encourage the production and buying of fuel-efficient cars, he said.